The lender has now launched a real-time digital tool designed to simplify personal finance management.
The in-app budgeting tool, Free2Spend, determines a user’s daily disposable income figure in real time, based on income and expense information input into the software, helping users achieve savings goals.
The bank gave the example of someone saving for a $20,000 car. It stated: “[If] you have a monthly income of $5,000 with monthly expenses like rent, utilities and bills of $2,500, Free2Spend will take these into consideration to provide a unique daily spend figure for the month (or the chosen pay cycle) to be spent however you please.”
Pointing to research undertaken by the digital bank, which found that 59 per cent of Australians are “increasingly overwhelmed by personal finance”, and that one in five Australians don’t have adequate budgeting tools, UBank CEO Lee Hatton claimed that Free2Spend would help take the “stress and guesswork out of personal finance”.
“Australians have become confused by hundreds of numbers in their lives, from apps to bills to bank statements to even the money in their back pocket. Free2Spend will change that forever, designed to take the stress and guesswork out of personal finance,” the CEO said.
“Our research showed almost one in five Australians still don’t have the tools to accurately monitor their expenses, and 22 per cent don’t feel like they have the time to invest in keeping track anyway. Thanks to this latest innovation from the team at UBank, Australia can now take back that control with utter simplicity.”
Ms Hatton compared the new tool to fitness trackers, noting that the figure representing a user’s daily disposable income varies in accordance with spending behaviour.
“Just like fitness trackers have kept people moving to the goal of 10,000 steps a day, Free2Spend does the same with your finances by consolidating your spending and saving goals into one number that changes with you and your life,” the CEO added.
“If you go over or under that number, the tool automatically decreases or increases your daily spend for the rest of the month. By automating the saving process even more, our customers will be free to spend on the things they love.”
Ms Hatton went on to highlight the difference between UBank’s in-app tool and other budgeting tools that, she claimed, focus on “negative behaviour”.
“When developing Free2Spend, we noticed that budgeting tools focus on the past and bring to light negative behaviour, like over-spending or spending in certain categories, without providing easy tactics to help you readjust and recover,” Ms Hatton continued.
“At UBank, we’re less interested in what you spend your money on and are more focused on helping Australians achieve their financial goals. By giving our customers one simple number, we’re helping them make in-the-moment decisions and change their spending habits for the better.”
Ms Hatton concluded: “If you’re having a busy month or want an extra few cheat days to splurge on takeaway, go for it. Free2Spend will adapt accordingly so you can have your takeaway and still be able to put money aside for your next holiday.”
The tool has launched amid increased focus on consumer expenses, with several major banks requiring additional information and supporting documents to give an “accurate view” of their clients’ living expenses and the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry critically scrutinising how borrower expenses are calculated and verified.
Charbel Kadib is a journalist on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel held roles with public relations agency Fifty Acres, and the Department of Communications and the Arts.
Charbel graduated from the University of Notre Dame Australia with a Bachelor of Arts (Politics & Journalism).